The Democrats' midterm sweep adds another layer of concern for Asia tech, says Charu Chanana at Saxo Markets. The results stoke worries around tighter scrutiny of Big Tech, AI regulation and the prospect of reduced fiscal stimulus. Asia is particularly exposed as markets like South Korea are very chip-heavy.
While weakness is spreading across the AI supply chain, underlying demand for advanced chips remains strong, she notes. "That tells me this is still more of a repricing of expectations than a collapse in the AI growth story." Room for downside argues against rushing to buy dips, but it's key to distinguish between the companies financing the AI buildout and those supplying essential tech. For longer-term investors, selective accumulation on weakness makes sense.